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Actually the PS3 wasn't hacked at all. The guy even said he gave people a "tool" and they could do with it what they wanted. Ok, so let's see. You have to boot into linux and you can peek physical memory including looking through anything that's memory mapped. In order to do that, you have to pulse a line on the motherboard (requires taking system apart) and hope you get lucky with timing while his kernel module does a hard loop on setting some memory location. If successful, then and only then can you see physical memory.. while being booted into Linux. I assume the need for this is is because kernel modules (which you can obviously load freely) exist in a virtual address space so you can't directly access physical memory from them. So his stuff installs two hypervisor calls you can make from userland. I don't know why Sony is overreacting, because there's still a very long way to go to do anything on the PS3 from here. However, they may feel this is nipping it in the bud.

I generally disapprove of this action even though I don't use Linux on the ps3. Why bother, anyway? Not enough memory. However, don't ruin it for everyone else, Sony.